Swapping CATs

CAT holders are asked not to create, contribute to or use liquidity pools for CATs, for the following reasons:

• Liquidity pools would cause the price of CATs to fluctuate widely, undermining their intended purpose as pure units of account.

• Liquidity pools favor those who swap earlier (who manage to exchange at better prices) and harm those who swap later (who end up having to pay a worse price). Thus, if you use a liquidity pool to swap CATs for something else earlier than another member, you would be profiting more from that liquidity than the other member. This would be a case of free-riding on the other member's work and would be contrary to the third commandment of our code of honor.

• Making CATs available in liquidity pools would make them available to investors. But CATs should only be available for knights and benefactors.

So, CATs are, by definition and intentionally, very illiquid and difficult to swap. A Knight of The Stable Order working on a project that has been funded by a benefaction, by a grant, or by a donation may, at the moment of reporting a contribution, choose to immediately swap the CATs the he or she would receive by a corresponding amount from that project's funding.